Chorus move threatens to push up broadband pricing by $40/month, Vodafone claims

Forums › New Zealand Broadband › Chorus move threatens to push up broadband pricing by $40/month, Vodafone claims

tehgerbil

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#248487 28-Mar-2019 12:29

Telecommunications bosses are fuming at Chorus' proposed price to unbundle its network - or open it up so internet retailers can get more control over the services they offer, and how they're priced to the public.

Vodafone says it could mean the average customer pays $40 more for broadband per month than they do today.

Chorus is pitching a $28.80 monthly charge covering access to the fibre between the premise and the splitter - a key point where shared fibres are split into individual fibres that go into each customers' home or office. It would also charge retailers $200 a month to access feeder fibre from each splitter, which can connect up to 16 customers.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12217120

How accurate is this info?

chevrolux

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#2206191 28-Mar-2019 12:39

Won't affect standard wholesale rates from Chorus, just un-bundled access to the UFB network.

Vodafone are just mad that they won't be able to undercut people by installing their own OLT's/ONT's next to Chorus gear. Which was never going to stack up that well financially anyway as was evident when the copper got un-bundled - just look at the hundreds of ISAM's that VF have installed in roadside cabinets.... oh wait...

Jase2985

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#2206337 28-Mar-2019 15:01

they wanted this..... now they are complaining because its going to cost them.

who paid for most of the infrastructure they are going to use?

atomeara

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#2206344 28-Mar-2019 15:06

That is very misleading title from Vodafone.

I don't know anyone other than those 2 who even think unbundling is a good idea.

I am pretty sure ComCom can't step in until 2022.

atomeara

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#2206346 28-Mar-2019 15:08

tehgerbil:

Telecommunications bosses are fuming at Chorus' proposed price to unbundle its network - or open it up so internet retailers can get more control over the services they offer, and how they're priced to the public.

Vodafone says it could mean the average customer pays $40 more for broadband per month than they do today.

Chorus is pitching a $28.80 monthly charge covering access to the fibre between the premise and the splitter - a key point where shared fibres are split into individual fibres that go into each customers' home or office. It would also charge retailers $200 a month to access feeder fibre from each splitter, which can connect up to 16 customers.

https://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=12217120

How accurate is this info?

They could load up to 1:64 or even 1:128 but it won't take long before they have poor performance and unhappy customers start leaving.

sbiddle

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#2206356 28-Mar-2019 15:16

It's a totally misleading clickbait headline.

Broadband costs will *NOT* go up for any current UFB users as a result of this announced pricing.

The totally guesswork $40 figure refers to the amount a provider would be forced to charge on an unbundled UFB connection to deliver an equivilent service once wholesale and capex costs for overbuilding the existing UFB network with their own infrastructure were taken into consideration.

If providers chose to unbundle the UFB network the economics will never stack up unless they can get large numbers of people. It's for this reason large scale UFB unbundling will never occur, and why recent talk from Vocus and Vodafone has been nothing but PR spin.

Vodafone have zero $ to do anything at present - they can't even finish deploying LTE across the country. They don't have tens of millions to roll out unbundled UFB when their sole focus is cost cutting to make their balance sheet look good for their IPO.

quickymart

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#2206622 28-Mar-2019 20:14

I wonder if Vodafone/Vocus are just looking for sympathy, I can't see much else in this headline, really...

chevrolux

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#2206630 28-Mar-2019 20:32

quickymart:
I wonder if Vodafone/Vocus are just looking for sympathy, I can't see much else in this headline, really...

They only want to reinstall the deep hate NZers love to have for "Telecom".

They cry foul, look like the good guys calling out "Telecom" but as Steve said... nothing but the want for free PR.

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hio77

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#2206631 28-Mar-2019 20:33

i saw the pricing and suspected this would come in some flavor.

I was fearing it would be worse though, and that they would target areas that the PONFAS cost stacks up for.

Between pen pushers and it rolling though, it would have to go down the path of a forced migration much like the VDSL VoIP modem switch game they played..

End of the day, Provider needs their own splitter, their own ONT, their own OLT.

I was dealing with a customer today that had 5 ONT's installed at their property... Just think if each of those had a Vodafone ont each too! would be a heck of a nightmare to support if they were not familiar with their own network.

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#2206632 28-Mar-2019 20:34

People will be bailing once they start thinking Vodafone prices are going up but noone elses is.... muppets.

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hio77

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#2206633 28-Mar-2019 20:37

quickymart:

I wonder if Vodafone/Vocus are just looking for sympathy, I can't see much else in this headline, really...

to be honest, i would find it quite humorous if chorus limited splitters etc per account with them to stop two giants grouping to make costs feasible...

Unbundling of fibre really isn't for mass market, and per actual customer tail costs aren't bad considering you could pipe anything over that...

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Lias

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#2206638 28-Mar-2019 20:47

chevrolux:
quickymart:

I wonder if Vodafone/Vocus are just looking for sympathy, I can't see much else in this headline, really...

They only want to reinstall the deep hate NZers love to have for "Telecom".

Did it ever really go away? I think most people have slowly come around on Spark, but I don't know many people who don't think Chorus is at best as bad as Telecom was and is in fact probably worse.

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quickymart

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#2206651 28-Mar-2019 21:03

sbiddle:

It's a totally misleading clickbait headline.

Broadband costs will *NOT* go up for any current UFB users as a result of this announced pricing.

The totally guesswork $40 figure refers to the amount a provider would be forced to charge on an unbundled UFB connection to deliver an equivilent service once wholesale and capex costs for overbuilding the existing UFB network with their own infrastructure were taken into consideration.

If providers chose to unbundle the UFB network the economics will never stack up unless they can get large numbers of people. It's for this reason large scale UFB unbundling will never occur, and why recent talk from Vocus and Vodafone has been nothing but PR spin.

Vodafone have zero $ to do anything at present - they can't even finish deploying LTE across the country. They don't have tens of millions to roll out unbundled UFB when their sole focus is cost cutting to make their balance sheet look good for their IPO.

I know they're different technologies, but what happened with copper unbundling? That was hailed (from memory) as being akin to the Second Coming of Christ...but it just died a gradual death, didn't it?

chevrolux

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#2206672 28-Mar-2019 21:19

There was a few parts to the 'copper unbundling'.

It led to the creation of the UBA products which meant anyone (well any ISP) could buy a DSL circuit, pump it through to their own network, and sell it to a customer. It was regulated, and gave everyone a fair playing field and we have a super competitive market because of it it.

But there was also UCLL that allowed anyone to install their own ISAMs (or DSLAM's or whatever) in exchanges or roadside cabinets. Then only the piece of copper was rented to get to the customer. A bunch of exchanges had gear installed, and then along came cabinetization, and all the gear in the exchanges gave an inferior level of service compared with the gear in the cabinets. No one bothered installed their own gear in the cabinets, because it would cost waaaaay too much, and UBA was regulated anayway.

UFB unbundling is akin to UCLL.

sbiddle

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#2206689 28-Mar-2019 21:36

The PR spin put on this by Vocus and Vodafone is trying to play on end users - statistics can be used to show anything you want..An example of which I'll use now using their own stats they've provided.

A typical FFP has 43 connections on average with a maximum of 48 (Chorus stats). In a typical FFP Chorus have 3 distribution fibres with 16 way splitters.

Vocus and Vodafone combined have around 40% of the broadband market. If we are to assume 70% of properties would be on fibre in three years that would give around 30 connections per FFP. 40% of that is 12 which means on average Vocus / VF should be able to have 12 customers per FPP.

Their own data shows with 12 connections they could have a cost of $45.37 per customer for the dark fibre between the customer ONT and their OLU. Compare that to the wholesale cost of Gigabit which is currently $65, and dropping to $60. They then need to factor in electronics costs on top of that, and truck rolls for installation of the splitter and ONT.

Unless they're planning to hike their plans I have no idea why they think the average customer would have to pay $40 more.